SMBC seals €6.4bn deal to become world's second-largest aircraft lessor

SMBC will finance the deal through a combination of debt and equity. File photo.

SMBC Aviation Capital has agreed to buy smaller rival Goshawk Aviation for an enterprise value of $6.7bn (€6.4bn) in a deal it said would make it the world's second-largest aircraft lessor by number of aircraft.

The acquisition to create a combined company with €37bn in assets comes six months after Ireland's AerCap Holdings consolidated its position as the world's largest aircraft lessor through its takeover of General Electric's leasing business. 

SMBC, which is owned by a consortium including Japan's Sumitomo Corp and Sumitomo Mitsui Financial Group, said it will take over a portfolio of 176 owned and managed aircraft to bring its total fleet to 709.

With 261 more Boeing and Airbus aircraft on order, SMBC's fleet will outnumber the 832 fellow Dublin-headquartered Avolon either own, manage, or have on order.

"We are undertaking this transaction at a strategic point in the cycle with a strong recovery building across the global airline industry and we expect the transaction to be accretive to SMBC Aviation Capital's return on capital," SMBC chief executive Peter Barrett said in a statement.

SMBC will finance the deal through a combination of debt and equity. 

The six Goshawk-owned aircraft that are located in Russia and subject to EU sanctions are excluded from the transaction. 

-Reuters